The scarcity of dollars in Nigeria threatens to increase food prices and loss of over forty thousand jobs in the country if the trend continues. This comes amid the rule that bars manufactures and importers from using imported material or importing items listed on the banned list.
The Nigerian populace may soon feel the pinch of high food prices if the dollar scarcity continues to hit the country. The ban on imports has made it difficult for local manufacturer to import raw materials, which are important for the production of the goods. In addition, reduced production means that most companies will lay off workers especially workers in production departments. Reports indicates that high costs of importation and the fall of the location currency has contributed to the rise of food prices in the country and this has made most industries to operate far below the installed capacities.
The currency crisis in the nation has resulted in falling of essential food items, this has led to an increase in the cost of production, and the imported substitutes are sold at a higher price. The naira has dropped in value while the consumer level of income remains constant. Therefore, the consumers are forced to pay more for the goods that they would pay little money. This increases their budgets and their income levels remain constant. Employment in the production sector is hanging by a thread as most companies seek to reduce operational costs through personnel lay off.
Business in Nigeria is no longer profitable especially to companies in production and food sector. The cost of production is so high that the companies will not sustain to operate and still make profits. Most companies require forex to by raw materials, most firms are forced to operate under capacity, and this is a big problem especially in the manufacturing sector. Employees are going to lose jobs in the near future if the trend continues. Consume food prices have raised incredibly by over 10% in the last one month because of the dollar sanctions.